Court Clarifies Applicability of Land Use Law Statutes of Limitation

Click here to read the published opinion.

On March 12, 2007, in a ruling that affects all developers and local agencies in California, the Third District Court of Appeal upheld the dismissal of a developer's lawsuit because it was time-barred by the Subdivision Map Act statute of limitations.

The Court's decision has statewide implications as it clarifies state law concerning the interplay of the statutes of limitation in the Subdivision Map Act and the Mitigation Fee Act when a developer challenges a local agency's conditions of approval.

The decision resolves a perceived conflict between the California Supreme Court decision in Hensler v. City of Glendale, which applied the Subdivision Map Act statute of limitations, and the Court of Appeal decision in Branciforte Heights, LLC v. City of Santa Cruz, which applied the Mitigation Fee Act statute of limitations.

THE CASE

In the case, Fogarty, et al. v. City of Chico, the City of Chico approved the developer's approximately 1,300-unit residential project, subject to a condition that shifted a portion of the residential units from one area of the project site to another area of the project site. The condition of approval was attached to both the subdivision map and zoning approvals. The developer sought to challenge the condition of approval and filed its lawsuit within 90 days of the City's decision, but did not serve the lawsuit until the 98th day. Both the Subdivision Map Act and the Planning and Zoning Law have 90-day file and serve statutes of limitation.

At trial and in the Court of Appeal, the developer argued that the disputed condition of approval was subject to the Mitigation Fee Act (Gov. Code §§ 66000 et seq.) and its 180-day statute of limitations because the condition was an "exaction." The City argued that the condition of approval was not an exaction and was subject to the Subdivision Map Act (Gov. Code §§ 66410 et seq.) and Planning and Zoning Law (Gov. Code §§ 65000 et seq.) and their 90-day file and serve statutes of limitation. The Court agreed with the City, explaining that the disputed condition of approval was not an exaction. According to the Court, for the condition to be an exaction, the condition must "divest[] the developer of either money or a possessory interest in the subject property." The condition in dispute did neither; it was "simply a restriction on the manner in which the [developer could] use its property."

Allen Matkins attorneys James Meeder and David Blackwell represented the City of Chico through both the trial court and Court of Appeal proceedings.